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Bank forecloses on Stockton CA city hall. Ouch

Stockton CA borrowed to build their new city hall, couldn’t make the payments, and the bank has seized it. The city decides today whether whether to make bankruptcy contingency plans if negotiations with creditors fail (which they almost certainly will.)

A bankruptcy filing means the city will be able to break existing contracts and agreements with public labor unions and Wall Street creditors, all of whom will be doing whatever they can to stop Stockton from filing. This bankruptcy will be widely watched.